Lawmakers study school board’s budget process

County council’s role also up for scrutiny.

Spurred by Shell Point Elementary parents upset their school might be closed, local lawmakers plan to study how the Beaufort County Council and Board of Education arrive at the yearly budget to operate schools and whether a change might do some good.

Rep. Shannon Erickson, R-Beaufort, said a group of Shell Point parents came to her devastated their school was on a short list of those recommended for possible closure in light of a $4 million funding shortfall.

While the Beaufort County Council approved the Beaufort County School District's $175.3 million budget in June, it rejected a 2 percent tax increase necessary to pay for the budget in full.

(County council members urged the school district to make use of its fund balance instead, but school board members hold that a 15 percent reserve fund nets taxpayers millions in savings through low interest rates available to those with strong bond ratings.)

The $2.4 million shortfall in the current year's school budget is compounded by unintended consequences of state Act 388 of 2006: a mass of second-homeowners have switched from secondary homes (taxed at 6 percent) by claiming South Carolina as their primary residence. Those who switch are taxed at 4 percent for the county, with zero going to operate schools. The school district has lost more than $4 million over the past two years alone due to the switch, and County Council has not raised taxes for schools to compensate.

"The county council is blaming the school board and the school board is blaming county council, and it seems Shell Point is caught in the crossfire," said Cathy Emmert of the school's Parent-Teacher Organization.

Erickson told the Shell Point parents to make public comments to the school board, which they've done on several occasions.

Erickson said she then received a letter from Shell Point School Improvement Council Chair Lisa Kindwall asking for the delegation to take a more active role.

"We understand your emphasis on state-level issues but we need your help in looking at what oversight, public involvement and transparency exists during the development and approval of the School District/Board's budget," Kindall wrote.

"If county council has withheld funding to the school district that ultimately forced the proposal to close Shell Point Elementary, it would seem an investigation of some kind is necessary.

"Conversely if the school district/board has been negligent during the budgeting process then another type of examination is required."

Erickson made a motion Nov. 30 at a meeting of the legislative delegation on Hilton Head to study how the school budget is passed to evaluate whether legislative action might improve the process.

According to Rep. Bill Herbkersman, R-Bluffton, who chairs the delegation, there are at least three possible outcomes of a semi-formal hearing on the school budget likely to take place in early January.

First, the study group could recommend the delegation introduce legislation that would give county council line item control over the school budget -- as opposed to power over only the tax rate as now.

Second, the delegation could introduce legislation giving the school board autonomy over not only how the money is spent, but the ability to set the budget total and tax rate to pay for it.The third option would be to do nothing.

"We're getting pressure from both sides, from county council and the school board, and from taxpayers to find out what's going on and to do something," Herbkersman said. He said Stu Rodman and Jerry Stewart on county council and Jim Bequette and George Wilson on the school board have been vocal on the budget debate.

"There's so much conjecture. We thought it might be good to get everyone in the same room to determine whether we should do nothing or whether we could take some kind of action," Herbkersman said.

Action, both legislators said, would come in the form of local legislation introduced at the State House, with only the Beaufort County legislators' approval needed to enact it.

"It's a study committee," Erickson said. "It may be we say this is a perfect system and there are checks and balances and the option is there for everyone who wants to be involved."

She said the format of the first study group session will be 15 minutes of public conversation followed by 45 minutes for the school district and school board to present a "budget 101," including how they arrive at their budget each year and how the public is involved.

Next, she said, county council will also have 45 minutes to explain how it interacts with the school budget process. Finally, there will be a 15-minute wrap-up period. Erickson said she didn't yet have a date and time for the session, but she did say she wants it held in County Council Chambers so it can be televised and the public and media can attend."The normal citizen, as the (School Improvement Council) is finding, the normal public doesn't understand the system," Erickson said. "I think to have a 45-minute breakdown is going to be very enlightening."